The most common type of IRS tax garnishment is the wage garnishment. This is the process of deducting money from an employee’s salary or monetary compensation. Sometimes this could be the result of a court order. In the USA, such garnishments are limited by federal law to 25 percent of the disposable income that the employee earns.
One of the worst that can happen to you if you’re a tax debtor is an IRS tax garnishment. This could be the most unforgiving financial event that you will ever experience and should be avoided if at all possible.
It is a known fact that the IRS will track you or your money down, sooner or later. The garnishment process does not require a court order or even a hearing. The “Notice of Levy” is mailed to your employer from IRS computers. If you owe over $25,000, it will be mailed by an IRS collections agent. In the past, the garnishment notice had a waiting period so that you would get some time to make arrangements with the IRS and stop the seizure before it started. However, this is not the case now.
Depending on how much you earn and how large your tax debt is, you could go for years without a paycheck. Although the longest most people can take the punishment is a few months. At that point, most will quit their job and seek employment elsewhere, thinking that will help.
How to Stop IRS Tax Garnishment
If you are not in a situation to pay your taxes, you may be able to work out a payment plan with them directly. Be warned that the IRS will want most of your take home pay. If you are not able to pay, then they will go after what you own and your paycheck.
If you receive a notice from the IRS that they are garnishing your wages, it will be very tough to digest. At this point, you will need to consult with an IRS tax attorney. There are several options they can pursue based on your financial situation. You could qualify for a reduction in the amount of taxes you owe (an offer of compromise) or a payment plan. However, take note that these are difficult. Make sure you are aware of the steps and the fee schedule. Last thing you would want is to be deeper in debt with no relief.
If the case you’re facing a dire financial situation the tax attorney may direct you to a bankruptcy lawyer. Again, the same advice on choosing a bankruptcy lawyer applies. They should offer a free consultation and disclose their fee schedule.
Although declaring bankruptcy does not eliminate your tax debt, it will release any garnishment. You will have to meet the qualifications for bankruptcy (Chapter 7 and Chapter 13). There is a big difference between Chapter 7 and 13. Chapter 7 will discharge your qualified unsecured debts while chapter 13 will consolidate your debts to be managed by a court appointed trustee. The point is to get breathing room so you can get financially back on your feet.
Last but not the least, seek qualified professional help. You are in a place that is very scary so be very wary of scams looking to exact more pain.
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